Run After The Smugglers (RATS) continues

Anti-smuggling agents of the Philippine National Police (PNP) Criminal Investigation and Detection Group (CIDG) arrested yesterday a suspected smuggler who is also facing 12 estafa cases before several courts in Metro Manila based from the files of the National Bureau of Investigation (NBI).

CIDG chief Chief Supt. Jesus Verzosa identified the suspect as Sammy Lee, 41, a resident of Talayan Village, Quezon City. The suspect was in the custody of the CIDG as of presstime.

While being interrogated at the CIDG headquarters, Lee allegedly tried to bribe CIDG investigating officer Insp. Pedro Velasco with P300,000 in exchange for his release. Velasco turned down the offer.

Lee will be charged for violation of Article 210 of the Revised Penal Code (direct bribery) and Section 3601 of the Tariff and Customs Code (diversion and fraudulent importation).

Police Supt. Benjamin de los Santos, who led the CIDG anti-smuggling operatives, said his team seized three 20-footer container vans loaded with plastic resin pellets. The estimated value of the shipment was P3.5 million.

The CIDG report said the cargo was allegedly taken out of the Bureau of Customs warehouse last Saturday without paying the required taxes.

The same shipment was supposed to be delivered to the Customs Bonded Warehouse No. 1687 at the consignee’s address. Instead, it was allegedly diverted to Consumers Plastic Packaging Corp. with address at 98 Mulawin St., Lawang Bato, Valenzuela City.

Verzosa said diversion of imported shipment could be a clear violation of Section 3610 of the Tariff and Customs Code.

CIDG probers identified Liontex Enterprises, Inc., as the company being used by Lee in his alleged smuggling runs. The CIDG operatives said Lee was using two prominent personalities who in turn claimed to be closely connected to a "powerful person" who serves as their alleged protector.
How Lee’s shipments were able to sneak past Customs’ ports puzzled investigators.
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Sammy Lee is also suspected for money laundering. The CIDG Director, Chief Supt. Jesus Verzosa, was instructed by no less than the president herself not to cease on investigating the illegal businesses of the alleged big-time smuggler.

To-date, 16 alleged dummy firms alternately used as conduits in Lee’s operations were discovered by the CIDG. Also, being looked at, is the possibility of Bureau of Customs officials' and personnels and other government employees' involvement in the grand conspiracy of smuggling operations within the Customs’ premises.

THE BUREAU of Immigration has placed suspected big-time smuggler Samuel Lee in its hold departure order.
Lee, who has purported ties to First Gentleman Jose Miguel “Mike” Arroyo, was arrested by the police on Sunday at the Ninoy Aquino International Airport upon his return from Hong Kong. He was arrested for allegedly ordering the diversion of a shipment of plastic resin from a customs bonded warehouse to a company in Valenzuela City.

He posted bail on Wednesday.

Acting Commissioner Arthel Caronongan said eight other people accused of rice smuggling in a separate case were also placed in the hold departure list.

He identified them as Franco Arsistio, proprietor of Ariscor General Merchandising; Joel Ruiz, proprietor of Joruan General Merchandise; customs broker Wendylyn Cabang; Enriquito Dizon, president of Great Harbor Services Corp., and the latter’s officers, namely Liberty de Ramos, Walter de Ramos, Elenia Ambrosio, and Josephine Fabro.

They were accused of misdeclaring a three-million-peso rice shipment as packing machines. Ariscor General Merchandising and Joruan General Merchandise were the consignees of the rice shipment from Hong Kong.

EVEN Bureau of Customs officials and employees, who have somehow managed to keep their reputation clean, admit, not without some embarrassment, that their bureau is one of the most corrupt agencies of government. Thus, it is not unusual that people like Samuel Lee prosper fabulously. What is unusual is that Lee was arrested early this week.

Lee is described by a police official as "the most notorious smuggler of plastic resin." Another police official said Lee is among the "well-entrenched" smugglers who are considered "untouchable." Officials also say Lee, who has been in the business since 2001, is widely known in the customs area to be a close associate of two siblings who are specially close to the heart of somebody with strong links to Malacañang.

But Lee was arrested last March 6 in connection with a shipment of plastic resin, valued at some P3.5 million, that was diverted from a customs bonded warehouse. He got into deeper trouble when he offered P350,000 for his freedom to arresting police officers. On March 8, he was charged with three counts of technical smuggling.

Lee is supposed to be the first big fish caught in the latest campaign against big-time smugglers launched last January upon orders of the President, following a series of reports linking Vicky Toh, a former secretary of First Gentleman Jose Miguel Arroyo, and her brother Tom to the illegal activity. But instead of raising hope that a crackdown has begun, his arrest has only raised questions about how far the campaign would go. The identities of other big-time smugglers are common knowledge in customs circles. In fact, the Bureau of Customs is supposed to keep an "order of battle" containing the names of at least 200 big-time smugglers. So what action, if any, has been taken against the many others whose names are on that list?

But then, this is not the first "crackdown" against smugglers announced by the Arroyo administration. In the last five years, it has trumpeted various measures that were supposed to plug a hole that drains the government of as much as P100 billion in revenues yearly by some estimates. The President has seldom missed the opportunity to announce the filing of charges against smugglers and their cohorts in customs or the creation of anti-smuggling teams. In 2002, for instance, she formed the Anti-Smuggling Intelligence and Investigation Center. In 2004, she designated Interior Secretary Angelo Reyes as head of the newly created Office of the Anti-Smuggling Presidential Adviser and created the National Task Force on Anti-Smuggling. In January 2005, Reyes announced the deployment of elite units composed of "highly trained and crack" Armed Forces of the Philippines and Philippine National Police operatives to hunt down big-time smugglers.

In May 2005, charges were filed against oil company executives in what Department of Finance officials touted as the start of a crackdown against smuggling. Earlier, lifestyle checks were conducted on some customs officials and a number were found to have amassed unexplained wealth. Only last Jan. 25, Customs Commissioner Napoleon Morales vowed to file 32 cases against suspected smugglers to prove the bureau's commitment to stop technical smuggling.

But after all the noise about going after smugglers and corrupt customs officials, has anybody been jailed? One customs official, who failed the lifestyle check and was reportedly charged with violation of the anti-graft law, is back as deputy commissioner. It seems all the much-publicized programs to combat smuggling and corruption in the Bureau of Customs have come to naught. Smuggling remains widespread and intractable as ever.

However, to blame this problem wholly on the Arroyo administration may be unfair. Smuggling goes way, way back to as long as anyone cares to remember. It has flourished from one administration to another. But remarkably, the key players have largely remained the same. Only the conductors have changed.

A few months from now, expect another "crackdown" to be announced. But sooner than later, Sammy Lee could be back to his merry old ways. He seems to live a charmed existence. Unlike most others who languish in jail before their cases move, the wheel of justice seems to turn like a well-greased machine for him. A P150-million tax evasion case filed against him and his business partners last year was dismissed by the Department of Justice a few months later. In just a couple of days, the recent bribery case against him was downgraded to the lesser charge of corrupting a public officer, and soon thereafter he was freed after posting bail. This is one more case that suggests that we should look beyond the smugglers and the Bureau of Customs to get to the root of the problem.

LAST week’s airport arrest of a suspected smuggler may have scored points for the government but the involvement of Bureau of Customs officials in the release of the shipment of plastic resin that was misdeclared as packaging materials only indicates that all is not well with its anti-smuggling campaign.

Samuel Lee, who government prosecutors recommended to be slapped with three counts of smuggling along with his cohorts, allegedly ordered the diversion of three container vans of plastic resin from a customs bonded warehouse to a company in Valenzuela City. He was later released after posting a bail of P360,000. Lee was among those named as suspected big-time smugglers in a recent Senate hearing, along with Vicky Toh and Lucio Lao Co, both reportedly close to First Gentleman Mike Arroyo.

Though lauding Lee’s arrest, Senator Mar Roxas said that the anti-smuggling drive has become a ningas cogon campaign. “This is just one arrest among a long, long list of notorious smugglers who continue to sabotage the economy,” he said.

Roxas, who chairs the Senate committees of trade and commerce and economic affairs, said about P175 billion in revenues is lost every year due to technical smuggling.

With the issue fortunately back in the headlines, we bring back PCIJ’s four-part series on smuggling in the Philippines published in late October 2004. The series focuses, among others, on technical smuggling — which involves the misdeclaration undervaluation, misclassification of goods, and other kinds of importation fraud — citing the example of onion farmers in Nueva Ecija and shoemakers in Marikina who are being driven out of business. It shows figures from industry organizations and government studies to show that technical smuggling is now being done on a massive and unparalleled scale.

Technical smuggling, in fact, is the main way in which goods are brought into the country. Outright smuggling, where goods are slipped in without going through Customs, is minor in comparison. And yet, the Bureau of Customs does not acknowledge the magnitude of technical smuggling in the country, much less take measures to contain it. The series examines the collusion between Customs officials and technical smugglers as well as the inability of government agencies to get their act together on smuggling.

The PCIJ smuggling report begins by giving an overview of the extent of the problem: the estimate of the revenues lost to smuggling range from P89 billion to P200 billion a year, enough to wipe out a big chunk of the budget deficit and to finance the building of thousands of schools and one million low-cost houses.

The series examines the impact of housing on both agriculture and industry. Farmers cannot sell their produce because the market is swamped with cheap imports and manufacturers are forced to downsize or close down operations because of the entry of dirt-cheap smuggled products. Almost every industry in the country has been affected: illegal imports range from onions to shoes, from chicken legs to pork belly, to floor tiles, tires, garments, resins (used to make plastics) and even charcoal. These wares flood both wet markets and upscale malls, easing out local goods.

News: Smugglers’ haven raided

FIVE hundred Customs agents and police raided 168 Mall, a popular shopping center in Binondo, Manila, in what President Gloria Macapagal Arroyo yesterday called the country’s biggest crackdown on smuggling.

“I am very proud to have received [a report] that today, even as we speak, we are conducting the biggest raid against smugglers in the history of the Philippines,” she told high-level officials from Washington and the largest American investors in the Asia-Pacific region.

“This is going to fight corruption. This is going to raise revenues. This is going to protect the businessmen who are doing legitimate production, and this is the kind of reform that we will continue to do alongside our constitutional reform to make our process of lawmaking more attuned to the new flat economy,” she said at the annual meeting of the Asia-Pacific Council of American Chambers of Commerce (Apcac) at the Makati Shangri-La Hotel.

Shoppers and stall owners at the mall were surprised when Customs agents, policemen, lawyers and examiners poured into the three-storey building at 10 a.m. and searched some 800 stalls for smuggled merchandise.

By 6 p.m., they had confiscated some 20,000 50-kilo rice sacks of merchandise, including toys and novelty items, watches, home decorations and textiles, mostly made in China. Examiners were conducting an inventory into the night.

“This is the biggest operation we have had,” said acting Bureau of Customs Commissioner Napoleon Morales, who added that the raid was the most successful he has seen in 30 years with the agency.

Morales said they raided the mall after the Retailers Association of the Philippines complained to the bureau that merchants there were engaged in unfair practices.

Under the law, Morales said, Customs agents may visit stores and demand evidence of payment of duties and taxes on foreign articles openly offered for sale or kept in storage.
He added that if no such evidence can be produced, such articles may be seized and subjected to forfeiture proceedings.

Manila Police District director Chief Supt. Pedro Bulaong said some 50 officers provided support for the operation in case some stall owners offered resistance.

Addressing the Apcac, Mrs. Arroyo said the raid should allay fears of some US investors that competition from low-priced smuggled goods would hurt their businesses.

“To you I say, American businessmen from all over the Asia Pacific, businessmen from all over the world who are doing big business here in the Philippines, we will do our part to make the Philippines a business-friendly place to live, work and invest in,” she said.

The Apcac, consisting of 26 American chambers in the Asia-Pacific region, has interests in over 10,000 business entities and manages a trade volume of more than $400 billion and direct investments of over $200 billion.

Yesterday’s raid came a week after the President ordered Budget Secretary Rolando Andaya Jr. to release P5 million to the Customs bureau for its “Big Brother Watch” program that would help authorities track smuggled goods.

The President also instructed Morales earlier to buy X-ray machines from China that would cut to five minutes the usual five hours needed to inspect cargo shipments.

The clampdown on smuggling came on the heels of a US government report that tagged the Philippines as “a drug smuggler’s paradise.”

“Corruption among the police, judiciary and elected officials continues to be a significant impediment to Philippine law enforcement efforts,” said the report prepared by the Bureau of International Narcotics and Law Enforcement Affairs.

Also yesterday, Morales ordered the Intelligence and Enforcement Group to subject all shipments from China to 100 percent examination.
The 168 Mall on Reyna Regente is one of the most popular shopping centers in the area, especially during holidays, because of its low prices.

Customs spokesman Deputy Commissioner Gallant Soriano said prices at the mall wouldn’t be so low if stall owners paid the right taxes.
He said the raid was conducted after a month-long surveillance of the shopping center.

Waldo Villamayor, 168 Mall external affairs officer, said the shopping center has at least 800 tenants or stall owners, mostly Chinese nationals, on the first and second floor of the building, and more than 80 stockrooms and warehouses on the third floor.

He told Customs officials they would extend all assistance possible. “We are not afraid of anything. We are doing legal business here,” he said.
Villamayor told reporters he hopes the authorities would conduct a fair and honest operation.

“We are not the only ones selling those kinds of items here in Binondo. In fact, some of our tenants have stalls in other shopping centers in the area with the same merchandise,” he said. With Jing Villamente

^^^ actions taken to stop smuggling and tax evasion should always go hand-in-hand with efforts of collecting more taxes. millions of pesos are lost from the government's coffers because of smuggled goods.

Yesterday’s raid came a week after the President ordered Budget Secretary Rolando Andaya Jr. to release P5 million to the Customs bureau for its “Big Brother Watch” program that would help authorities track smuggled goods.

The President also instructed Morales earlier to buy X-ray machines from China that would cut to five minutes the usual five hours needed to inspect cargo shipments.

i think that the implementation of the lateral attrition law and the intensified campaign on going after the smugglers have been very instrumental why the collection of the BoC is improving. that was very evident when BoC collection tops Feb. target

our officials, tax collectors, auditors in the BoC must really see to it they meet their target for they will surely be castigated and be given proper administrative punishment if they fail. its the administration's goal to reduce budget deficit further and to achieve it everybody must do their part. the PNP and CIDG is helping out apprehend smugglers. guys, even ordinary citizens can help by reporting anomalies we personally know of.

^^^ actions taken to stop smuggling and tax evasion should always go hand-in-hand with efforts of collecting more taxes. millions of pesos are lost from the government's coffers because of smuggled goods.

well said, but we still want some more results. how about the case of sammy lee?

NEWS: Task force on smuggling revived

President Gloria Macapagal Arroyo has designated Customs Commissioner Napoleon Morales as the chief of the newly reorganized task force that will combat smuggling in the country.

The President also tapped the Armed Forces, Philippine National Police, National Bureau of Investigation, Coast Guard, Criminal Investigation and Detection Group (CIDG), National Prosecution Service, Philippine Ports Authority and National Intelligence Coordinating Agency as members of the task force.

President Arroyo issued the order by way of Executive Order 509, reorganizing the task force, which was created two years ago through EO 385.
“The elimination of smuggling and other acts contrary to customs laws remains among the top priorities of the government as such acts deprive the government of much-needed revenues and unfairly compete with legitimate businesses,” the President stated in EO 509. “The Commissioner of Customs is hereby designated head of the Task Force on Anti-Smuggling.”

The task force revival followed the arrest of suspected big-time smuggler Samuel Lee and the raid at 168 Mall in Binondo where smuggled merchandise from China, Taiwan and Korea are openly displayed and sold.

Lee was arrested upon his arrival from Hong Kong on March 5. He was accused of smuggling three containers of resins, a raw material for plastic products such as monobloc chairs and tables, at the Port of Manila on March 3.

The 168 raid, on the other hand, was conducted after officials and members of the Retailers Association of the Philippines filed a complaint informing the agency that the two-year-old, three-story establishment is engaged in unfair trade practice.

The Federation of Philippine Industries also deplored the unabated entry of smuggled goods, mostly from China, to the detriment of local producers and retailers.

Lee’s arrest was the biggest operation and achievement made by the CIDG against smuggling while the 168 raid was the biggest conducted by Customs men in the agency’s history. At least 500 Customs agents raided the 168 complex.

Customs officials said an estimated P120 billion in duties and taxes are lost yearly to technical smuggling, or misdeclaration and undervaluation of shipments.

Customs legal service chief Reynaldo Umali, who supervises the bureau’s Run After The Smugglers (RATS) program, said the agency is now preparing to move in on individuals involved in technical smuggling.

The bureau is building up its cases against suspected big-time smugglers.
Morales said some of the names were mentioned by senators during a budget hearing..

The bureau is also investigating the involvement of certain Customs personnel in technical smuggling.

the continuous effort of the government to thwart smuggling activities is very admirable. we can't expect age-old problem to go away that instant. good thing, the authorities have remained indefatigable to continue the fight against smugglers.

these smugglers can be put out of business if the witnesses to such activities will speak up and report it to the proper authorities.

latest i've heard is that Sammy Lee is facing a P78-M tax evasion case. looks like the BIR, the BOC and all the investigative group are not taking a rest on Lee's violations.

i believe its the government's goal to cleanse the country from criminal and impish acts by relentlessly going after law offenders and corrupt officials such as drug traffickers, kidnappers, terrorists, smugglers, tax evaders and other corrupt big and small.

The Bureau of Customs’ elite team of lawyers has filed 13 cases under its RATS (Run After The Smugglers) campaign.

Of the 13, two have been filed before the trial courts. These are the cases of Eduardo Untalan and Akram Mohammad Choudry, in connection with the illegal importation of luncheon meat “MaLing” and a Toyota Land Cruiser, respectively, worth about P50 million.

Customs files 13 cases under anti smuggling drive

The Bureau of Customs’ elite team of lawyers has filed 13 cases under its RATS (Run After The Smugglers) campaign.

Of the 13, two have been filed before the trial courts. These are the cases of Eduardo Untalan and Akram Mohammad Choudry, in connection with the illegal importation of luncheon meat “MaLing” and a Toyota Land Cruiser, respectively, worth about P50 million.

In a report submitted to President Gloria Macapagal Arroyo, newly designated Task Force on Anti-Smuggling chief Customs Commissioner Napoleon Morales said that the bureau also filed the complaint against Ronnel Cortes, proprietor of Dah Jaan Enterprises and its customs broker, Rufina Cabrera, for the gross undervaluation of air-conditioning compressors with assembly.

Morales said the item was declared at $150 per unit as against the market value of P20,000 to P25,000 per unit.

The BoC also filed two cases against eight persons, including the proprietors of Arsicor General Merchandise and Joruan General Merchandise and its brokers and forwarders, for misdeclaring glutinous rice worth P3.14 million.

Morales said the bureau also charged 15 persons, including the owners of Ocean Navigator Express Logistics Inc., and its officers, brokers and representatives with smuggling resin worth P27 million.

Customs legal service director, lawyer Reynaldo Umali, who supervises the RATS, said his office will file criminal charges against brokers and more than 20 personnel of the Philippine Economic Zone Authority (Peza) for their alleged involvement in the smuggling of 15 containers of resins, raw materials in producing monobloc chairs and tables, at the Manila International Container Port last month.

RATS is monitoring 151 smuggling cases involving 390 personalities for various violations of the Customs code. It also compiled a list of 32 cases for case building and eventual filing.

BoC has adopted an action plan that includes the designation of a prosecutor to attend to each case filed by the agency, Morales said.

President Arroyo, through Executive Order 509, designated Morales as the chief of the newly reorganized eight-member Task Force on Anti-Smuggling whose members include the heads of National Bureau of Investigation, Armed Forces, Philippine National Police, Coast Guard and Criminal Investigation and Detection Group.

The task force, which was originally created in 2004 under former Interior and Local Government Secretary Angelo Reyes, was formed to combat smuggling activity in the country and capture P100 billion in revenues foregone each year.

Customs files 13 cases under anti smuggling drive

The Bureau of Customs’ elite team of lawyers has filed 13 cases under its RATS (Run After The Smugglers) campaign.

Of the 13, two have been filed before the trial courts. These are the cases of Eduardo Untalan and Akram Mohammad Choudry, in connection with the illegal importation of luncheon meat “MaLing” and a Toyota Land Cruiser, respectively, worth about P50 million.

In a report submitted to President Gloria Macapagal Arroyo, newly designated Task Force on Anti-Smuggling chief Customs Commissioner Napoleon Morales said that the bureau also filed the complaint against Ronnel Cortes, proprietor of Dah Jaan Enterprises and its customs broker, Rufina Cabrera, for the gross undervaluation of air-conditioning compressors with assembly.

Morales said the item was declared at $150 per unit as against the market value of P20,000 to P25,000 per unit.

The BoC also filed two cases against eight persons, including the proprietors of Arsicor General Merchandise and Joruan General Merchandise and its brokers and forwarders, for misdeclaring glutinous rice worth P3.14 million.

Morales said the bureau also charged 15 persons, including the owners of Ocean Navigator Express Logistics Inc., and its officers, brokers and representatives with smuggling resin worth P27 million.

Customs legal service director, lawyer Reynaldo Umali, who supervises the RATS, said his office will file criminal charges against brokers and more than 20 personnel of the Philippine Economic Zone Authority (Peza) for their alleged involvement in the smuggling of 15 containers of resins, raw materials in producing monobloc chairs and tables, at the Manila International Container Port last month.

RATS is monitoring 151 smuggling cases involving 390 personalities for various violations of the Customs code. It also compiled a list of 32 cases for case building and eventual filing.

BoC has adopted an action plan that includes the designation of a prosecutor to attend to each case filed by the agency, Morales said.

President Arroyo, through Executive Order 509, designated Morales as the chief of the newly reorganized eight-member Task Force on Anti-Smuggling whose members include the heads of National Bureau of Investigation, Armed Forces, Philippine National Police, Coast Guard and Criminal Investigation and Detection Group.

The task force, which was originally created in 2004 under former Interior and Local Government Secretary Angelo Reyes, was formed to combat smuggling activity in the country and capture P100 billion in revenues foregone each year.